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Bill to outlaw online gaming resurfaces in Congress

Bill to outlaw online gaming resurfaces in Congress

U.S. Representative Jason Chaffetz, R-Utah, speaks with Representative Trey Gowdy (R-SC) (R) during "The Security Failures of Benghazi" hearing on Capitol Hill, Washington D.C., Oct. 10, 2012. Chaffetz on Wednesday, Feb. 4, 2015, reintroduced a bill that would reimpose a federal ban on wagering over the Internet, reigniting a debate that has split the gaming industry and sparked a broader discussion over the spread of gambling. (REUTERS/Jose Luis Magana)

The measure by Rep. Jason Chaffetz would roll back a Department of Justice opinion made public in December 2011 that held the Wire Act of 1961, the law that prohibits transmitting wagers, applies only to sports and not to other forms of gambling.

Chaffetz, a Republican, said it was wrong that a decision with such broad implications was made by a small group of attorneys. He said decisions to legalize online gambling should be made by Congress.

“There are some people who would like to see online gaming. There are some people who would like to see a poker carve-out,” Chaffetz said. “My message to them is you think online gaming is good, introduce a bill and pass it.”

In the meantime, Chaffetz said his bill would roll back the landscape to where it stood before the Justice Department opinion was issued. That would affect laws passed after that date by Nevada, Delaware and New Jersey that made it legal for residents of those states to place online wagers.

“I am very optimistic this legislation can pass,” Chaffetz said Wednesday. Without offering specifics he said he has received “some pretty good indications from leadership this is something that will hopefully be brought up sooner rather than later.”

Chaffetz, who is chairman of the House Oversight and Government Reform Committee, said he plans to mount “a full push” for the bill.

He said he might call a hearing “specifically on how the online gaming industry has started to target children” by employing characters from the Wizard of Oz and other family entertainment on “free play” sites that he said “blur the lines” short of gambling for money.

“We have not suggested we would issue a subpoena or anything yet,” he said. “That is always a tool in our bag we could pull out at any time. It is an issue that is very important, very pervasive.”

Chaffetz said he was not persuaded that online gambling can be confined or that operators can shield young people from wagering.

“I don’t see any way that technology can just alone solve this problem,” he said. “It’s so easy to bypass. You get a smart 14-year-old in here …”

Rep. Tulsi Gabbard, D-Hawaii, the only other state alongside Utah with no legal gaming, sponsored the bill with Chaffetz. Six Republican House members signed on as original co-sponsors – Lamar Smith of Texas, Trent Franks of Arizona, Steve King of Iowa, Charles Dent of Pennsylvania, George Holding of North Carolina and Randy Forbes of Virginia.

Reintroduction of the “Restoration of America’s Wire Act,” or RAWA, carries over the push for online gambling restrictions that was waged in the lame-duck session of the last Congress but fell short.

Sen. Lindsey Graham, R-S.C., sponsored a companion bill last year. His spokesman said Wednesday that Graham has not yet set a date to reintroduce it this year.

The drive against Internet gambling has been prompted by Sheldon Adelson, the billionaire chairman of Las Vegas Sands Corp., who says Web gambling is bad as a moral proposition and also a bad business path for casinos.

Adelson, one of the largest contributors to Republican candidates, said in 2013 he would be willing “to spend whatever it takes” to halt the spread of gambling over the Internet.

Chaffetz was asked about Adelson’s influence in a meeting with reporters. He shook his head and said the issue “is not just about any one person.”

“He is an active player,” Chaffetz said of Adelson. “I’m glad he is supporting our bill. You have active people on both sides of this issue. There is a lot on the line and I’m glad he agrees with me on this one.”

On the other hand, companies such as Caesars Entertainment and MGM Resorts International view Internet gaming, properly controlled and regulated, as an opportunity to develop new customers and build new streams of revenue.

The Coalition for Consumer and Online Protection, an advocacy group backed by Caesars and MGM Resorts, said Wednesday an Internet gambling ban would be “bad policy” that only would drive Web gaming “into the shadows.”

Nevada and the two other states that have legalized some forms of online gambling “have already successfully implemented safe, regulated online gaming programs that protect adult consumers and result in important revenue for the states,” said spokeswoman Allison Siciliano.

“We know that when policymakers examine the facts they will conclude that an online gaming ban will not only drive an existing black market further into the shadows, but will put consumers and children at even greater risk,” Siciliano said.

At least 10 states are considering bills to legalize or expand online gaming, according to Gambling Compliance, an analyst organization.

Chaffetz said he would advise states looking at online gaming to “put some reins on that horse because I don’t think that thing is going to go very far.”

Chaffetz noted attorneys general from 15 states and Guam have urged Congress to restore the Wire Act, and the FBI has expressed concerns about the potential for fraud and money laundering.

Chaffetz said casinos that want to expand online “are banking on converting millions of people to generate billions of dollars in revenue that they haven’t been able to do before, and that means by getting it into markets like Utah and all the nooks and crannies of the country. This is the way they believe they can expand gaming and they’re probably right but I don’t think this is the right way to do it.”